Commonwealth of Australia Explanatory Memoranda

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TELECOMMUNICATIONS LEGISLATION AMENDMENT (PROTECTING SERVICES FOR RURAL AND REGIONAL AUSTRALIA INTO THE FUTURE) BILL 2007

                             2004-2005-2006-2007


     THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA


                       HOUSE OF REPRESENTATIVES




 TELECOMMUNICATIONS LEGISLATION AMENDMENT (PROTECTING
SERVICES FOR RURAL AND REGIONAL AUSTRALIA INTO THE FUTURE)
                         BILL 2007




                     EXPLANATORY MEMORANDUM




     (Circulated by authority of Senator the Hon. Helen Coonan, Minister for
             Communications, Information Technology and the Arts)
     TELECOMMUNICATIONS LEGISLATION AMENDMENT
     (PROTECTING SERVICES FOR RURAL AND REGIONAL
          AUSTRALIA INTO THE FUTURE) BILL 2007


                                     OUTLINE
The purpose of the Telecommunications Legislation Amendment (Protecting Services
for Rural and Regional Australia into the Future) Bill 2007 (the Bill) is to amend the
Telecommunications (Consumer Protection and Service Standards) Act 1999 (the Act)
to protect the $2 billion principal of the Communications Fund.

Part 9C of the Act establishes the Communications Fund. The purpose of the Fund is to
provide an income stream to fund the Commonwealth Government's response to any
recommendations relating to regional, rural or remote telecommunications made by the
Regional Telecommunications Independent Review Committee to the Government in a
report of the Committee's review of the adequacy of telecommunications services in
regional, rural and remote parts of Australia.

The Bill will maintain the Communications Fund's principal amount of $2 billion so
that only funds in excess of $2 billion are available for implementing the Government's
response to recommendations of the Regional Telecommunications Independent
Review Committee and related purposes specified in section 158ZI of the Act. This
will reflect the Government's intention that the $2 billion principal of the
Communications Fund is maintained as a perpetual fund, with only earnings on
investments available for expenditure.

                    FINANCIAL IMPACT STATEMENT
The Bill is not expected to have any financial impact on Commonwealth expenditure or
revenue.
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                              NOTES ON CLAUSES

Clause 1 - Short title

Clause 1 provides that the Bill, when enacted, may be cited as the Telecommunications
Legislation Amendment (Protecting Services for Rural and Regional Australia into the
Future) Act 2007.

Clause 2 - Commencement

Clause 2 provides that the Bill, when enacted, will commence on the day after it
receives the Royal Assent.

Clause 3 - Schedule(s)

Clause 3 provides that each Act that is specified in a Schedule to the Bill is amended or
repealed as set out in that Schedule and any other item in a Schedule has effect
according to its terms. Schedule 1 to the Bill amends the Telecommunications
(Consumer Protection and Service Standards) Act 1999.

Schedule 1 - Amendment

Amendment of the Telecommunications (Consumer Protection and Service
Standards) Act 1999

Item 1 - After section 158ZJ - Insertion of new section 158ZJA - Balance of the
Fund must not fall below $2 billion

Part 9C of the Telecommunications (Consumer Protection and Service Standards) Act
1999 (the Act) establishes the $2 billion Communications Fund. The purpose of the
Communications Fund is to provide an income stream to fund the Commonwealth
Government's response to any recommendations relating to regional, rural or remote
telecommunications made by the Regional Telecommunications Independent Review
Committee to the Government in a report of a review of the adequacy of
telecommunications services in regional, rural and remote parts of Australia.

Section 158ZJ of the Act provides for the sum of $2 billion in cash to be credited to the
Communications Fund Special Account. This was an initial deposit to the Account,
which occurred in September 2005, and the balance of the Communications Fund is
likely to exceed $2 billion as a result of future investment growth.

It is the Government's intention that the Communications Fund is to be a perpetual fund
with the principal of the Fund maintaining at least its nominal value of $2 billion.

Item 1 would insert a new section 158ZJA of the Act to give effect to this intention by
making it clear that the Minister for Communications, Information Technology and the
Arts must take all reasonable steps to ensure that the balance of the Communications
Fund Special Account and the value of investments of the Communications Fund do not
fall below $2 billion.
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This will ensure that the only money that is available to be spent for the purposes of the
Account as specified in section 158ZI is income or interest on investments of the Fund.